Westerly Hospital sale to L+M completed

Attorney Mark Russo, special master for Westerly Hospital, right, hands off the paperwork to be signed by L+M Hospital President and CEO Bruce Cummings, left, during the ceremonial signing of the final papers to close the sale of Westerly Hospital to L+M Friday, May 31, 2013, at Westerly Hospital.

Westerly — As of midnight today, The Westerly Hospital became part of the Lawrence + Memorial Hospital Corp., ending 91 years as an independent hospital to join a larger partner that can provide the financial stability it has long sought.

"This is a great moment in the history of both communities," said Ulysses Hammond, chairman of the board of the parent of the 280-bed L+M Hospital in New London.

On Friday afternoon, the deal transferring ownership of Westerly Hospital was finalized when Bruce Cummings, president and chief executive officer of L+M, and attorney Mark Russo signed deed documents in a brief ceremony. Russo was the court-appointed special master of Westerly Hospital when it entered receivership in December 2011 after years in the red, and oversaw hospital operations and negotiated the deal that saved the hospital from closure with L+M's purchase.

Under the terms of the purchase, L+M agreed to a total of $69 million in cash and other commitments, including the assumption of $22 million in debt, closing costs of $1.5 million, $6.5 million in working capital during the first two years, and $30 million in new technology, equipment and expansion of services over the next five years.

"These guys are going to do a tremendous job," said Russo, a Providence attorney who had been spending two to three days a week at Westerly Hospital while he was special master. The state regulatory process, he said, was long and complicated, but in the end, "everything came together. This shows the regulatory process will work with you."

Cummings said the transition will be mostly "invisible" to the general public, except for new signs and a new logo that will be introduced in June. Westerly Hospital will retain its name but with the affiliation with L+M acknowledged.

On Monday, Cummings will host "meet-and-greet" sessions with Westerly Hospital staff. T-shirts with the message, "In this together" with the two hospitals' names will be distributed. During the receivership, 45 Westerly Hospital employees were laid off, leaving about 600 full- and part-time employees. The hospital is the town's largest employer.

One of the first acts when the new ownership took effect involved the in-patients and emergency room patients there at the time. At midnight, patient bracelets were to be changed to reflect the new ownership, a requirement of health care regulations because of coding on the bracelets used for billing, medication and identification information, Cummings said.

On Friday, there were 45 in-patients at the 125-bed hospital, which sees its busiest months over the summer when Westerly beaches attract many to town. This morning, inpatients will be asked to sign documents so they can be readmitted to the new legal entity providing their care.

Cummings said a command center was activated at 6 p.m. Friday to oversee transition of electronic medical records, billing and other computerized systems to the L+M network.

L+M is actively working to rebuild the medical staff at Westerly Hospital, starting with the hiring of a new obstetrician, two family physicians, and a general surgeon and three physicians to supplement services during the summer, Cummings said. Orthopedic surgeons are being interviewed.

In addition, digital X-ray machines have replaced older equipment, and digital cardiac imaging equipment has been installed, Cummings said. "No-lift" devices used to move patients will be installed throughout the hospital. Billing, purchasing and other systems have been retooled to become more efficient and generate more revenue.

Cummings said all "essential, routine services," including critical care units, imaging, pharmacy and medical-surgical units will be maintained at both hospitals.

"We are all for appropriate duplication," he said.

Services that will be available only at L+M include cancer care, which will be available at a new $34.5 million cancer care center under construction in Waterford. Emergency angioplasty patients will also be brought to L+M.

The only "routine service" that will no longer be available is obstetrics. On Friday afternoon, a Westerly woman who went into labor three weeks early delivered a baby girl at L+M. She had originally planned to deliver at Westerly Hospital, but switched when she learned the obstetrics department would close May 31, L+M spokesman Mike O'Farrell said.

L+M's purchase is one of 12 pending or completed hospital sales and affiliations involving Connecticut hospitals since 2009, Michelle Sharp, spokeswoman for the Connecticut Hospital Association. Among the pending deals is the affiliation of The Williams W. Backus Hospital in Norwich with the larger Hartford Hospital system.

Sharp said health care reform is prompting many hospitals to look to become more efficient with partnerships and affiliations.

Hammond, the L+M chairman, said the two hospitals have been moving toward this step for years.

"They were very close in the 1990s," he said.

In April 2011, he recalled, he telephoned William McKendree, then chairman of the Westerly Hospital board, to suggest starting talks toward a partnership. The two hospitals began talks, but Westerly Hospital's financial condition was such that it could not maintain operations while negotiations continued, and it entered receivership.

Hammond said the current health care landscape favors hospitals with a larger critical mass of patients and doctors than either Westerly Hospital or L+M have alone.

"It's better to be more nimble, better able to provide a wide range of health care services and a medical staff that can meet them," he said.